The Budget also made some amendments to the Service Tax Rules, 1994 which has been effective from 1st March.
With the announcement to increase the service tax net from 12.36 per cent to 14 per cent in the Budegt 2015-16, eCommerce transactions through websites and mobile apps based on 'aggregator model'-- be it cab services and online shopping -- is likely to be trapped under service tax net.
"In respect of any service provided under aggregator model, the aggregator, or any of his representative office located in India, is being made liable to pay Service Tax if the service is so provided using the brand name of the aggregator in any manner," said the Finance Bill 2015, presented by Finance Minister Arun Jaitley in Parliament.
"If an aggregator does not have any presence, including that by way of a representative, in such a case any agent appointed by the aggregator shall pay the tax on behalf of the aggregator."
The Budget also made some amendments to the Service Tax Rules, 1994 which has been effective from 1st March. According to leading law firm Khaitan & Company, "In respect of certain eCommerce service a transaction, the person liable to pay Service tax has now been clearly specified."
As per the Union Budget 2015 proposal, for services offered under aggregator model, the aggregator, or its representative office in India would be now made liable to pay Service tax if the service is provided by using the brand name of the aggregator in any manner.
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